Pong Corp. wants to raise $4.3 million via a rights offering. The company currently has

490,000 shares of common stock outstanding that sell for $44 per share. Its underwriter

has set a subscription price of $19 per share and will charge a 5% underwriting fee based

on the gross proceeds of the rights offering.

a, How many new shares will have to be offered? (4 points)

b. What is the ex-rights stock price? (4 points)

c. If you currently own 7,000 shares of stock in the company and decide not to participate

in the rights offering, how much money can you get by selling your rights? (4 points)